SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 1, 1998
FIRST DEFIANCE FINANCIAL CORP.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 0-26850 34-1803915
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (Commission File No.) (IRS Employer I.D. No.)
incorporation)
601 Clinton Street, Defiance, Ohio 43512
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 762-5015
<PAGE>
FORM 8-K
Item 2. Acquisition or Disposition of Assets.
Exhibit 1. Press Release Announcing Completion of the
Acquisition.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
Date: July 16, 1998 FIRST DEFIANCE FINANCIAL CORP.
By: /s/ John C. Wahl
------------------------
John C. Wahl
Senior Vice President,
Chief Financial Officer
<PAGE>
EXHIBIT 1
CONTACT: Don C. Van Brackel, Chairman, President and CEO
First Defiance Financial Corp.
(419) 782-5015
Alvin A. Siegal, Chairman and CEO
The Leader Mortgage Company
(216) 696-8000
First Defiance Financial Corp. Announces the Completion of
the Acquisition of The Leader Mortgage Company
Defiance, Ohio, July 1, 1998 -- First Defiance Financial Corp. (Nasdaq NMS-FDEF)
("First Defiance") today announced that it has completed the acquisition of The
Leader Mortgage Company ("Leader"), a privately held, Cleveland, Ohio-based
mortgage banking company. Under terms of the agreement, the aggregate purchase
price was $39.6 million in cash. The pricing reflects 310% of Leader's March 31,
1998 book value (adjusted for certain journal entries to be recorded at closing)
and 8.4 times Leader's pro forma fiscal September 30, 1998 earnings.
Leader will operate as a subsidiary of First Defiance's wholly owned subsidiary,
First Federal Savings and Loan ("First Federal"), Defiance, Ohio. Leader will
maintain its Cleveland headquarters and continue to operate under The Leader
Mortgage Company name. First Defiance does not anticipate any staff or
management changes as a result of the merger.
Leader, founded in 1960 by Chairman Alvin A. Siegal, is a mortgage banking
company specializing in bond programs for first-time homebuyers. As of June 30,
1998, the company had a total servicing portfolio of approximately 81,000 loans
and $4.7 billion. Unaudited earnings for the six months ended March 31, 1998
were $2.1 million. Loan originations for the six months ended March 31, 1998 and
fiscal year ended September 30, 1997 were $566 million and $1.1 billion,
respectively. The equity of Leader at March 31, 1998, adjusted for certain
anticipated closing entries, was $12.8 million. Leader's return on equity for
the six months ended March 31, 1998 (annualized and adjusted for certain closing
entries) and the fiscal year ended September 30, 1997 were 32.5% and 24.1%
respectively.
"We are very happy to announce the completion of this transaction and we look
forward to a long and successful relationship," commented Don C. Van Brackel,
First Defiance's Chairman and CEO. "First of all, Leader is an excellent
performer which has recently achieved outstanding financial results. Second,
their niche in the first time home-buyer bond programs has allowed them to grow
substantially the last several years. And, most importantly, all of the key
members of management will be staying."
"We believe that there will be significant cross-selling potential within
Leader's customer base," continued Van Brackel. "We also believe we will have
some opportunities with our funding sources to reduce Leader's overall borrowing
costs and we also will have an opportunity to take advantage of the substantial
escrow deposits that Leader maintains. We also believe the combination of these
two institutions will be accretive to First Defiance's net income and earnings
per share immediately upon acquisition. We have been seeking opportunities to
better leverage our capital base since our conversion from mutual to stock
ownership. This transaction will help us to accomplish that objective, and it
should result in an enhanced return on equity for First Defiance in the future."
Alvin Siegal, Leader's principal shareholder and its Chairman and CEO added that
"Leader is excited about this merger with First Defiance. With an expanded
capital base Leader will be in a position to increase its activities in the
origination and servicing of residential mortgage loans for first-time
homebuyers through the programs in which we operate. Additionally, we believe
that the increased capital will allow Leader to expand into states where growth
had been limited in the past due to Leader's capital constraints." Mr. Siegal
continued, "We are pleased that the operations of Leader will remain intact. We
believe that this combination is beneficial for our shareholders, customers and
employees."
First Defiance Financial Corp. conducts business primarily through its wholly
owned subsidiary, First Federal Savings and Loan, Defiance, Ohio, which is a
federally chartered savings and loan association. It currently has eleven full
service offices located in five counties in the northwestern corner of Ohio.
Total assets at March 31, 1998 were $577 million and stockholders' equity was
$102 million. First Defiance was represented in this transaction by Charles Webb
& Company, a division of Keefe, Bruyette & Woods. Leader was represented by
McDonald & Company Securities, Inc.
This press release may contain certain forward-looking statements regarding the
acquisition of Leader, including earnings accretion, which are based on
management's current expectations regarding economic, legislative and regulatory
issues. The factors which may cause future results to vary materially include,
but are not limited to, general economic conditions, changes in interest rates,
loan demand, and competition; changes in accounting principles, policies or
guidelines; changes in legislation or regulation; and, other economic,
competitive, regulatory and technological factors affecting each company's
operations, pricing, products and services.
